Indian Overseas Bank gets board approval for rights offer

A file photo of an Indian Overseas Bank branch. Photo: Pradeep Gaur/Mint

Chennai:Indian Overseas Bank said Monday it has got board approval for a rights offer through a private placement of shares.

“The Central government has sent in a letter stating that it will provide capital but has not specified the quantum last week,” said M. Narendra, chairman and managing director. “Since we don’t know how much capital we may get from the government, we have taken an enabling resolution for a rights issue.”

The Chennai-based bank informed the stock exchanges that its board of directors approved a plan for rights issues of 200 million fully convertible preference shares having a face value of Rs10 each at par.

The shares can be converted into equity shares of Rs10 at premium (to be decided at the time of the issue) at a future period not exceeding five years from the date of the issue, the bank said.